Penny stocks vanishing fast

MARKETS GET A NEW LOOK

850 cos trading below paid-up values a year ago decline to 338.

Penny stocks, or those scrips that trade below their paid-up value, will soon be a rare species. Only 16 in every 100 stocks today are traded below their paid-up value. A year ago, the number was 45 for every 100 scrips. There are about 2,200 actively-traded stocks.

Over the past one year, as many as 534 companies ceased to be penny stocks. The number of companies trading below their paid-up values declined from 850 a year ago to 338 on July 5, 2005. A total of 880 companies traded below their paid-up values in July 2003.

These 534 companies have increased investors' wealth by Rs 16,718 crore (244 per cent). The aggregate market capitalisation of these 534 stocks increased from Rs 6,854 crore in July last year to Rs 23,572 crore, yesterday. 
 

Penny wise
(Stock prices in Rs)	July 6, 04	July 6, 05	% change
Stone India	1.82	89.05	4792.86
Sanjivani Paranteral	2.25	79.8	3446.67
KEI Ind	4.5	146.9	3164.44
Venus Remedies	8.81	263.1	2886.38
FCGL Industries	2.69	64.4	2294.05
Prajay Engineers Syn	2.06	47.95	2227.67
Simplex Mills	9.02	199	2106.21
Yashraj Containers	1.38	29.8	2059.42
Sunshield Chemicals	1.72	36.79	2038.95
Kilburn Engg	2.9	56.65	1853.45

Of this, 46 stocks appreciated by more than 1000 per cent, 106 gained 500-1000 per cent and 324 rose by 100-500 per cent. This indicates that the market prices of over 90 per cent stocks have more than doubled in the past one year.

The smart rally in the market prices of penny stocks has been backed by a healthy financial performance in 2004-05.

A total of 411 of these companies, results of which are available till now, have reduced their losses by 97 per cent -- from a net loss of Rs 4,312.54 crore in 2003-04 to a net loss of Rs 118.50 crore in 2004-05. Ninety companies doubled their net profit and 56 staged a turnaround during the year.

Stone India was the largest gainer in the last one year. The stock appreciated by almost 50 times to Rs 89.05 on July 5, from its price of Rs 1.86 a year ago. The company has posted a Rs 2.29-crore net profit in 2004-05 against a net loss of Rs 8.96 crore in the previous financial year.

Sanjivani Paranteral gained 3447 per cent from Rs 2.25 to Rs 79.80. The net profit of the company for 2004-05 zoomed to Rs 2.77 crore against Rs 11 lakh in the last financial year.